SMALL businesses in Hampshire have issued an “urgent wake-up call” to the government with figures suggesting almost half think their performance will worsen in the coming three months.

The Federation of Small Businesses (FSB) found 72 per cent of business owners in the South East did not expect their performance to improve in the coming three months.

Forty-nine pe cent thought their performance would worsen, compared with 44 per cent nationally – a five-year high.

Only a quarter of businesses in the South East were planning to increase investment this quarter, while 16 per cent were expecting to decrease it.

Among businesses that trade internationally, 24 per cent reported an increase in exports over the past three months.

Nicola Bailey, FSB development manager for Hampshire and the Isle of Wight, said: “These findings must serve as an urgent wake-up call for policymakers. Even in the aftermath of the financial crash, we didn’t see such a sustained string of negative confidence readings. Three years of political uncertainty and rising costs have stifled output and left small firms unable to plan, invest and grow.

“There’s a real sense of exasperation among small firms. Big decisions – whether that be taking on new staff, purchasing machinery or embarking on sales in a new country – are being put on hold because we have no idea what our trading environment will look like. And what’s worse, two thirds of those that would be negatively impacted by a no-deal scenario say they can’t prepare for it.

“We need the government to seize this final opportunity to secure a Brexit deal: one that protects free trade, enables access to the right skills and includes a transition period.

“We also need to see the chancellor come forward with an ambitious Budget aimed at reversing the impacts of uncertainty. He must throw lifelines to the small exporters that are especially hamstrung. Direct financial assistance – such as £3,000 Brexit vouchers – to enable access to expertise and support would mark a much-needed step forward.”

The FSB’s confidence measure, the Small Business Index (SBI), stood at minus 20 in the South East, down from minus eight in the last quarter. It is the fifth consecutive negative reading, which is unprecedented in the FSB’s history.

The survey found 67 per cent of small businesses said costs had risen over the past 12 months. The most frequently cited reasons were labour, cited by 40 per cent of firms, inputs (31 per cent), utilities (29 per cent), fuel (24 per cent) and regulation (23 per cent).

Nicola Bailey added: “The chancellor must compile a Budget which alleviates the impacts of rising operating costs, rather than simply adds to them. That means uprating the £3,000 discount on national insurance bills for small employers offered through the Employment Allowance and reintroducing a statutory sick pay rebate.

“Support with the costs of transport – especially fuel – and business rates would also help to reinject some optimism into a small business community that’s been held back by uncertainty for years now.

“Sole traders are also crying out for support in this unpredictable climate. Now is not the time to blindly push on with IR35 changes billed for April.”